Patent Maintenance Fees: Everything You Need to Know

Patent maintenance fees, also called renewal fees, are required by the USPTO on utility patents over the course of a 20-year period at three separate intervals.10 min read

What Are Patent Maintenance Fees?

Patent maintenance fees, also sometimes called patent renewal fees, are fees paid to the USPTO (The United States Patent and Trademark Office) to keep up a granted patent, typically a utility patent, that is already in force. With certain types of foreign patents, patent maintenance fees are also required for pending patent applications.

Patent maintenance fees are not mandatory for every type of patent. For instance, design and plant patents do not require maintenance fees. Also, some patents have laws about the maintenance fees required and how often they should be paid.

Patent Maintenance Fees in the United States

In the United States, patent maintenance fees are required for utility patents over the course of a 20-year period at three separate intervals. Patent maintenance fees are not required for design patents. This 20-year period begins at the time of patent filing or the priority date.

Maintenance fees are required at the fourth-, eighth- and 12th-year anniversary from the time the patent is granted. There is a "window period" in which the patent maintenance fees should be paid, which is a six-month period before the fee is actually due.

According to the USPTO renewal website, the fee schedule is as follows:

4+ years: $1,600 for large entity, $800/$400 for small/micro

8+ years: $3,600 for large entity, $1,800/$900 for small/micro

12+ years: $7,400 for large entity, $3,700/$1850 for small/micro

Additionally, the patent office charges penalty fees for late payments within six months of the due date, which is $160 for a large entity, $80 for a small entity, and $40 for a micro entity. If the payment is late due to unavoidable circumstances, there is a fee of $1,700 for a large entity, $850 for a small entity, and $850 for a micro entity.

(By definition: A small entity is an individual, a nonprofit organization, or a business that employs fewer than 500 people. To be classified as a micro entity, the applicant can't have an income of more than three times the previous year's median household income, approximately $50,000. The applicant also can't be named on more than four previous applications.)

Rules for United State Patent Renewals

The maintenance and renewal fees for a U.S. patent will only come due at three points during the life of the patent. These fees will only be payable after the patent has been granted. The first fee that you will be required to pay will come due 3 1/2 years after the patent has been granted. Once paid, this will allow the patent to stay in force past the fourth year.

The next fee will be due 7 1/2 years after the original date the patent was granted. The third and final payment will come due 11 1/2 years after the grant date. If you wish to pay the fees early, you can pay them up to six months before the date they are due. If you are late with a payment, late fees and penalties will begin immediately after the due date has been missed. If you get six months behind on payment, the patent will lapse.

The fees you will pay will depend on your entity classification:

A large entity will pay the most and typically has 500 or more employees.

A small entity will pay 50 percent of what a large entity will.

A micro-entity will pay 25 percent of what a large entity will and is a subset of small entities.

Foreign Patent Maintenance Fees

Foreign patent maintenance fees are quite different from those in the U.S. and are dependent upon the country in which the patent is filed. Most foreign patents require annual maintenance fees, which are also sometimes called patent annuities. Remember that maintenance fees are not required during the application process, and only apply after a patent has been granted.

Furthermore, foreign patent annuities tend to grow larger with every passing year until the maximum maintenance fee is reached. Therefore, you may start out paying a small, conservative fee, but every year, the maintenance fees involved will grow higher until you reach, for example, the tenth year. At this time, the fee will stay the same amount for the life of the patent.

There are different types of patent maintenance fees associated with foreign patents as well. These usually fall into three categories:

Government fee

Foreign associate fee

Local agent professional fee

While some of these fees are rather small in some countries, each is an important part of maintenance fee upkeep, and if not paid, can put your patent in jeopardy. In some countries, if you miss the deadline for any reason, there's no way to reinstate the patent. Some of these fees offer opportunities for a patent holder to do a little research and pay a smaller fee. For example, some countries do offer smaller annuities for small entities.

However, this information can be hard to find, and it is often hard to determine the exact limits of what makes an entity "small." If you're working with an annuity payment firm, it is best to garner a good understanding of the different fees involved in the overall patent maintenance fees you pay.

Why Are Patent Maintenance Fees Important?

Maintenance fees on your patent are important for a few reasons. While many inventors see maintenance fees as only a way for the USPTO to profit, there are other reasons for these fees. About 50 percent of patents expire simply because their owners disregard maintenance fee payments.

Some people assume that once a patent is expired, that clears the way for new patents. However, this isn't the case. When a patent expires, there is no impact on prior art, which means patents that were previously rejected based on prior art would still be rejected. The only effect when a patent expires is that the patent owner loses the right of exclusion.

If you do not pay your patent maintenance fees, your patent will expire and your invention will no longer be protected by the USPTO. The system is designed this way to continually allow the flow of new patents and weed out those patented inventions whose owners are no longer as focused on using their patent in product development.

Reasons to Consider Not Paying Patent Maintenance Fees

The business of filing for and obtaining a patent is costly. The estimated cost for a small business entity to file for a patent and maintain the patent with the associated fees for the long term can range from $220,000 to $440,000. While some patents turn out to be well worth the investment, this may not always be the case. It is good to evaluate the patent and the associated fees at every renewal period to decide if continuing to hold the patent would be a good financial decision.

As an example, suppose you invent a special automotive component this year and plan to use that patented utility to create a product, fully believing this patent will garner you a healthy return on sales going forward. By the fourth year, the patent still proves to be valuable, so you pay the maintenance fees. However, by the eight-year point, when patent maintenance fees are once again due, a greater product development has emerged, and the patent you hold is no longer as valuable. This would be a good reason not to pay the maintenance fees and allow the patent to expire.

Working with a patent review committee helps inventors decide whether a patent is worth keeping. There are several levels used in an evaluation process by these professionals to determine the logicality of paying the maintenance fees, including the following:

Whether the patent is still aligned with planned products and services

Whether holding the patent is important to protect ongoing product development

Whether the patent is particularly important to ward off outside patent development that could infringe on current business plans

Reasons to Consider Paying Patent Maintenance Fees

Even though maintenance fees make holding the rights to a patent costlier, it is well worth the ongoing investment for most patent holders. Continuing the maintenance fees means no one can legally infringe on your rights as the patent holder. There are situations when it is questionable whether a patent is worth the continued fees, but with advice from a patent attorney and/or a patent review committee, many inventors find paying the fees are a logical solution.

Keep in mind that there are ways that you may be able to reduce the costs of patent fees, even though the ways to do so are few. One way to cut the cost of patent maintenance fees in some countries involves having the patent endorsed with a License of Right, or LOR. The LOR endorsement shows others that you are willing to grant a license to the patent to any interested party. By having your patent endorsed with an LOR, you can see your maintenance fees drop by 50 percent.

What Happens When You Pay Patent Maintenance Fees vs. When You Do Not

It is highly important to keep tabs on maintenance fees once you are granted a patent. While the majority of maintenance fee payments are missed intentionally by inventors and business entities, there are some who either neglect the fee schedule or have misunderstandings about when fees should be paid. When the fee is paid, you continue to hold the right to your patent.

If the fee goes unpaid beyond the six-month grace period after the due date, the rights to that patent are forfeited. However, this doesn't mean that another person could step in and get a patent for the exact same invention. Whether an invention can be patented is always based on prior art. If your patent has been published, failing to pay your maintenance fees does not erase this publication. Therefore, if an application was rejected based on prior art, it would not be approved due to patent expiration because the prior art still exists.

Reinstating a Patent That Has Expired Due to a Failure to Pay Maintenance Fees

In the event that you have allowed a patent to expire by forgetting or failing to pay the maintenance fees, you may submit a petition to the USPTO to have it reinstated. By submitting this petition, you are asking the Patent Office to agree to accept payment of the maintenance fees late in exchange for reinstating the expired patent.

If the USPTO accepts the petition, then the payment will be reinstated and no longer considered expired. It is important to note that if during the period that the patent was expired, your competition had made preparations to make a similar product, you may not be able to enforce it.

Common Mistakes With Patent Maintenance Fees

There are mistakes that you must avoid with patent maintenance fees. No entity, whether large or small, is not at risk for mistakes, miscommunications, or misunderstandings where patent maintenance fees are concerned. A few of the most common mistakes include the following:

Allowing simple clerical errors to get in the way of paying maintenance fees in a timely fashion

Not taking into consideration the differences between foreign patent maintenance fees and processes for paying those fees

Waiting too long to reach out to the USPTO with questions regarding patent fees

Assuming the size of your entity for payment purposes without knowing for certain what amount you should pay

Because there are so many ways you could make a mistake with maintaining the fees associated with holding a patent for the long term, many inventors and businesses rely on a patent attorney or outside firm to handle the payments. This is especially true for those who hold multiple patents or patents in more than one country. Not every patent attorney firm will take on this responsibility, but many will. This gives you the peace of mind of knowing the ongoing maintenance is handled and documented accordingly.

Filing of Application for Reissued Patent With Broader Scope Deadline

Sometimes after filing an application for a patent, you may realize that the scope of the patent was too narrow. When this occurs, you may have the opportunity to refile to have your patent reissued under a broader scope. Under patent law code 35 U.S.C. 251(d), you will be able to file an application for a reissued patent with a broader scope as long as the application to reissue is filed within two years of the original patent being granted.

If you wish to apply for a reissued patent to narrow the scope of the patent, you may do that as well, as long as it is done within two years after the original patent was filed.

What Happens If the Original Patent Expires While the Reissue Application Is Pending?

Depending on the date of expiration your original patent was issued with, you may run into a problem where the original patent expires before the reissue application has been resolved. If this occurs, then the reissue application will automatically be terminated. This is due to the fact that the patent may only be reissued for the length that the original pattern has before it expires, making it pointless to issue if the patent has already expired.

An example where this could occur would be in the case where a patent had a 3.5-year maintenance fee for a series of reissued patents that is due on January 15, 2018. This involves two patents that were reissued as well as one that is pending an application. Since the fee is due on or before the 15th of January, you will be responsible for one payment on the latest reissued patent.

If the maintenance payment was instead due on the 16th of January, each of the reissued patents would require a separate fee to be paid for each reissue along with the original patent because the reissue patent is still pending on the due date. You should keep this in mind when creating budgets for maintenance fees. It's important to make early payments so that you can avoid fees and surcharges that can come across with multiple patents.

Frequently Asked Questions

Can you pay for multiple patent maintenance fees at once?

You can pay for multiple patent fees at once through the USPTO website. The site allows you to pay for as many as maintenance fees on separate patents as you need to at one time.

Once the fees are paid, how long does it take for the payment to register with the USPTO?

In most cases, the payment will be updated in your account within an hour. However, the length of time it takes for the USPTO to update your account can differ depending on how many patent fees you pay at one time. Further, it is always a good idea to pay the maintenance fees well in advance of the final cut-off date at the end of the six-month grace period if something goes wrong.

If you do not pay the maintenance fees on a patent, how long is it until the patent expires?

This can depend on several outlying factors. If you have missed a patent maintenance fee payment and are beyond your six-month grace period, it is best to look up the status of your patent using the USPTO website. If the patent is still listed as active, reach out to the patent office or your patent attorney for advice immediately.

In most cases, the patent will quickly become public domain, and your ownership will be revoked soon after a payment is missed. Patent owners do get one break: In 2013, the unavoidable delay standard was removed for owners who wished to reinstate patents that had been expired for more than two years because they hadn't paid maintenance fees.

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